Don’t Want to Get It

Caught this recent comment about my book Trend Commandments:

“I’ve found Covel’s previous books interesting, and have re-read ‘Trend Following’ multiple times. The latest book unfortunately does nothing to build on the previous works (for instance, there is still no attempt to deal with survivorship bias in the performance data), but instead loads the pages with random anecdotes and film quotations that tangentially supports his thesis. Disconcertingly, what the book lacks in substance is made up for in ego. If you’re not with him, you’re against him and a moron. Successful value investors? Don’t exist (sorry Mr. Buffet, you made your money through luck and speculating with derivatives). Covel admonishes the world for ‘going with the herd’… ummm… isn’t following a trend exactly that? Too light on science, way too light on humility.”

That is going in verbatim to the chapter titled Honest on next printing. It does make my Sunday morning that a critic calls himself a moron before I can. One definition of survivorship bias?

“Survivorship bias is the logical error of concentrating on the people or things that “survived” some process and inadvertently overlooking those that didn’t because of their lack of visibility.”

Trend Commandments in its entirety addresses this very issue–for those with their eyes wide open. However, for the critics that need to blow off steam an excerpt from the ‘Trend Commandments’ chapter ‘Honest’ may be helpful:

•••

Some will never know and will rip [Trend Commandments] as well. A famed Stanford University psychologist has said that a man with a conviction is a hard man to change. Tell him you disagree and he turns away. Show him facts or figures and he questions your sources. Appeal to logic and he fails to see your point. Now I could very easily avoid criticism, do nothing, say nothing, and be nothing, but quitting is not in my DNA. However, criticism is important and often invigorating for many reasons:

  • You are on the right track when a target appears on your back.
  • Making a sizable dent in public thought brings detractors and saboteurs. It’s part of doing business.
  • Trying to get everyone to like you is mediocrity.
  • You are going to be criticized if you play small or play big. Might as well play big. Criticism will come either way.
  • History does not remember those who pretend to be neutral. Picking sides, choosing those you want to be associated with, and sticking with your true beliefs is all that counts.
  • Speaking out on issues, that others are too afraid to do, will draw criticism.
  • Disgruntled people need to release anger. Standing there as an easy outlet for their anger is part of the gig. Criticism always parallels influence.
  • It takes courage to see things for what they are, not what you want them to be.
  • Poking an inferiority complex brings out vitriol–always.

Society’s insatiable push to discredit those who rock the boat, coupled with digital printing presses cataloging it all, has allowed village idiots and Nobel Prize winners to effectively share the same stage. In this environment, for many, the truth has ceased to matter.

•••

Other views:

“An outstanding book [Trend Commandments] for anyone who wants to become rich by trading markets. Today, government regulations and fiscal and monetary policies are badly distorting financial markets. Covel accurately explains why, in this ‘manipulated’ financial environment, you should never expect markets to move as you wish or expect. Rather, disregard your fundamental beliefs and simply follow the trend. Highly recommended!”
Marc Faber
Managing Director, Marc Faber Ltd.
Editor, ‘Gloom Boom & Doom Report’

“If you are even thinking of a career in trading, put down all the other books. Buy this one [Trend Commandments]. Read it. Now you can start your career.”
James Altucher
Managing Director, Formula Capital

“Fire up the barbecue. Michael Covel skewers the sacred cows of Wall Street with tasty bite-sized bits of the truth about what it really takes to succeed in trading and life. Wide-ranging, irreverent, revealing, eminently quotable, and right on the money.”
Charles Faulkner
Market Wizard Trading Coach

“A rapidly moving, non-technical, and outside-the-box effort that smartly captures the essentials of trend following.”
Peter Borish
Chairman and CEO, Computer Trading Corp

“Michael Covel’s Trend Commandments is full of practical wisdom in bite-size portions on the benefits of trend trading–written in a straightforward storytelling format. It’s definitely one to add to your financial bookshelf.”
David Stendahl
Signal Financial Group

“Michael Covel is the very best at explaining the concepts of successful trend following in plain English. I’m certain you’ll be a successful trader if you follow the ideas he outlines in Trend Commandments. This book (and his previous two!) are required reading for new employees in my office.”
Steve Sjuggerud
DailyWealth

“Investors have experienced two bear markets in the last decade. This has led to rising volatility, uncertainty, and investor angst. For some it has been a lost decade, but for trend traders it has been a decade of opportunity. Trend Commandments helps you focus on what matters most: the trend of the markets, whether up or down. You can profit from either. Trend Commandments is essential reading for those who have the desire to thrive and survive in an era of fast-paced trending markets.”
Jim Puplava
CEO, Chief Investment Strategist, PFS Group

“Buy and hold has been a difficult investment system for investors for a decade. In Trend Commandments, Covel challenges readers to think differently and question their beliefs about market ‘truths’ ingrained in them for years. Forewarned, you just may never see the world the same way again.”
Mebane Faber
Cambria Investment Management

“Covel’s Trend Commandments offers a breezy rumination on what is right about trend following and what is wrong about conventional trading approaches.”
Jack Schwager
Author of Market Wizards and Schwager on Futures series

32 thoughts on “Don’t Want to Get It

  1. this is your worst book so far…. and this is coming from a fan… i returned it after one day… it has nothing new in it…just a way for you to make some more money…fine but not from this pocket.. you lost a reader

  2. “Appeal to logic and he fails to see your point.” –

    Reminds me of a discussion I had some months ago. My opponent went short in the major indices in 2010, and he holds his positions until today, regardless them being deep in the red. He brought all kind of fundamental arguments: The USA is bankrupt, the Eurozone is more than bankrupt, China is in a bubble, Peak Oil, Demographics …

    I simply tried to tell him that all of this is true and well, but the markets obviously don’t share his opinion. He did not listen, became angry immediately, and started to tell me more fundamentals. I don’t know what he did expect, to convince me so the markets then start to fall? Did he think that its me who is causing the markets to rise?

  3. Quote “there is still no attempt to deal with survivorship bias in the performance data.”

    I think this is valid criticism; I remember reading several years ago on this very forum someone taking you to task over this and you just blowing them off. Other blogs/authors I have read sometimes do try to address this issue, but you just seemingly refuse to. Why? Wouldn’t it be better to answer your critics by addressing this and, into the bargain, proving your point even more strongly?

  4. I don’t know about his latest book (I have not read it yet), but I don’t think anyone should even start trading before reading Covel’s TREND FOLLOWING. If I had then I don’t think I would have lost thousands of dollars before seeing the light.
    By the way forget all those guys who tell you their systems will make you millions overnight.

  5. I’d have to think that Altucher’s endorsement is actually something else since he doesn’t advocate one have a trading career and has in the past declared the end of trend trading.

  6. Reminds me of the famous statement by George Bush, “You’re either with us, or against us”.

  7. I could have a good guess who the original critic you quoted was. Didn’t work for AIG by any chance did he?!

    Following the herd is not TF, TF is taking advantage of the fact that herds exist!! The fundamental difference is that herds don’t have an exit strategy.

  8. Exactly Al. I did not even get into his content yet!

    Every time I hear the phrase survivorship bias–I hear someone grasping for straws–especially in the context of trend following. Frankly, it’s comedy to hear it tossed around–like that critic just refuted the entire book by saying “survivorship bias”. There is a vested interest for many on wall street to never acknowledge trend following for a wide assortment of reasons.

    Maybe the academic wonkiness of the term makes them feel taller. If ANYONE looks at Bill Dunn’s track record as but one example, and their first thought is yell “survivor it’s irrelevant” …I would say that person is not very bright.

    This got debated heavily here:

    http://www.facebook.com/covel

  9. “Survivorship Bias” is the last straw of a failed arguement. It seems obvious that only the best survive and grow. Why wouldn’t you compare yourself to the best?

  10. – survivor bias
    – not robust enough

    I can guarantee you those are the two biggest “reasons” that more money is not moved to trend following. I have met with hundreds of consultants, glad I do not have to do that any longer. They love the following

    – we look at a universe of 500 stocks and perform rigorous research to find the “best” 100.

    – further, even more rigorous, research is done to find the absolute best for your portfolio.

    – we then display extreme discipline when it comes to selling name

    The consultants do this for all the various asset classes to come up with a “diversified” portfolio. Of course they never have a step that acknowledges that correlations go to 1 when the stuff hits the fan (2008/2009) and you need to raise cash and use truly non correlated strategies (trend following would be a good example of that as it sells the things that are going down and buys what is trending higher).

    Change?! No, they will not change. Most will do the same because

    1) it AIN”T their money. They get their fee and all is well
    2) they actually sell themselves as experts and must be great at giving “reasons”. Hey we know that certain areas of the market will trend and we will place some of our money with those managers because over the long haul several have outstanding track records. That just doesn’t make them sound “smart” enough. The fact that these same consultants were loading the boat on commercial real estare and other “alternative” assets at the top, well that uh… we’ll get back to you. The no one could have forseen that coming excuse has been surprisingly successfule for them

    I could go on all day. Trend Following works. The idea that people actually think the market is efficient is insane. Have you ever met anyone that is effieient in any aspect of their lives? How about a market made up primarily of investers that are managing other peoples money? Efficient?!

    As for the criticisms, BEAUTIFUL. Arrogant!!!! If you ever had the pleasure to speak with the manager of a large mutual fund or a consultant with Russell or a place of that level, well.

    The vast majority of money, individual and institutional is poorly managed. The louder the critics of Trend Followig are the more trouble their current strategies are in my opinion. If there is a group of people that need to be challenged it is the big shots in the $ management industry.

    Carry on Covel! Don’t take s#@$ from anyone!!!!

  11. Survivorship Bias does not affect TF systems since no TF system buys stocks that are on a downtrend. Survivorship Bias affects systems which use Fundamental information or trade based on strategies such as Mean Reversion.

  12. “In this environment, for many, the truth has ceased to matter.” – So true, and only trend following and other “objective” technical analysis will lead you down the right path.

  13. @Aaron, I was also surprised to see a comment by Altucher. I seriously doubt that he of “Dow 20,000 is around the corner” knows anything about Trend Following. He was long all the way through the 2008 Bear market, and he somehow thinks that the 2009 Bull market “vindicated” him. I’m sure he’ll ride the next Bear (whenever it comes) all the way down as well!

  14. I don’t understand all the talk I hear about “survivorship bias” when it comes to Trend Following.

    It’s like a couple of philosophers sitting in their living room debating what the weather is rather than stepping outside to settle it once and for all.

    If you don’t know what to think about TF, grab some paper, or a paper account, and start trading. Do it HONESTLY for a few months and you’ll have your answer.

    But I would recommend you NOT do it with real money until you’ve done it with paper. EVERYONE (100%) that I know personally who slams TF does so because they bailed on the system because they couldn’t stand to have losing trades and drawdowns. It was either too hard on their ego or their bank account…or both.

    You need absolute faith in the system first, then trade.

  15. This ‘survivor’ angle is for those:

    1. who have no clue.
    2. who are defending (or protecting) something else.
    3. who don’t actually read my books (or understand them).

  16. Simply comes down to whether the person decides to take the BLUE pill or RED pill.

    LOVED Parliament of Whores – from the quote to last sentence…couldn’t have been said more concisely and honestly

  17. #5 Andrew, have you actually read the book? Every last page of the book deals with the issue of survivorship bias–otherwise known as the excuse to belittle success and defend mediocrity. There are reasons people win, and there are reasons people lose. Every one of my books address those head on. The straw men raised by some reveal other issues–that frankly are better left for Dr. Phil’s couch.

  18. Just read a book by the VP of Nikko Securities who describes the day his 5-year-old taught him trend following.

    He was in his study looking at charts when his 5-year-old wondered in and asked what he was doing. He told the kid, “I’m deciding where I should sell.”

    The kid said, “Why would you sell it…it’s still going up?”

    The kid got it!

  19. How can a small group of traders like the turtles with as many of them still trading be survivorship bias. Michael Covel seems to have a person or persons out to trash his work. I have read the neg. reviews of his books.He had one person named Zumpie talk trash about the movie broke. Then this same person is following his other reviews and making comments about it. If i didn’t like someone’s book then i sure wouldn’t keep up with it. But this person does. Why? This person has a history of neg. reviews on amazon. Zumpie is a Dork.

  20. …why am I suddenly visualizing copies of “Trend Following,” “Turtles,” “Trend Commandments,” and “Broke” in Zumpie’s basement darkroom with big red X’s across them, while his mother — who owns the house — explains to the neighbours, “He’s a quiet boy…likes to keep to himself.”

  21. I find it so interesting to watch reviews on a new book. The folks who are the dogmatic ones, the ones with gripes, etc. typically have no clue what they are talking about. That’s not me not accepting criticism, that’s me the debater who wants to fight for a subject. When ill informed people review my work, I view it has a debate. Of course, they view it other ways: “That thin skinned author can’t accept criticism!”

  22. #21 Actually I do have a copy of the book, plus your previous book “Trend Following.” The only part of the book that alludes to survivorship bias that I can see is the one and a half pages of the “Lucky Monkey” section. Franky, blandly stating that Soros benefited less from luck that Buffet did (probabilistically speaking) and then asking the rhetorical question “Don’t you think something can be learned from successful trend followers?” (no matter how numerous, or how long lived some of them may be) does not address the issue at all! In case I have missed something, perhaps you would care to explicitly state on which pages you address the issue of survivorship bias and I will re-read them asap and get back to you.

  23. The entire book addresses the issue. Do you even know what you are arguing? Why don’t you try and make a case for your point–prove it in plain language that you can reason this through–as opposed to throwing one academic term out there like you have disproved the book. Are you trying to say these pro TFs are all lucky? Have some unique talent? There is a whole population of failed TFs out there I don’t discuss? Come on–let’s hear it–the floor is yours.

    If anyone truly had a counter–they would make it. So far–a bunch of one word academic whines that address zilch. People who think there is nothing to learn from an abundance of pro TF track records–and I have seen this for over a decade–are blind at best.

  24. Further, if this was really broken down we are looking at a very simple argument against my books–some people believe all of those month by month track records going back decades across many, many unrelated traders–is luck. The evidence says anyone who has that view is not informed.

  25. #28 Quote “The entire book addresses the issue. Do you even know what you are arguing? Why don’t you try and make a case for your point–prove it in plain language that you can reason this through–as opposed to throwing one academic term out there like you have disproved the book. Are you trying to say these pro TFs are all lucky? Have some unique talent? There is a whole population of failed TFs out there I don’t discuss? Come on–let’s hear it–the floor is yours.
    If anyone truly had a counter–they would make it. So far–a bunch of one word academic whines that address zilch. People who think there is nothing to learn from an abundance of pro TF track records–and I have seen this for over a decade–are blind at best.”
    #29 Quote “Further, if this was really broken down we are looking at a very simple argument against my books–some people believe all of those month by month track records going back decades across many, many unrelated traders–is luck. The evidence says anyone who has that view is not informed.”
    I am afraid I disagree with you when you say the entire book addresses the issue, and since you invite me to make my case, I will.
    Starting with the definition of survivorship bias from Wikipedia
    “In finance, survivorship bias is the tendency for failed companies to be excluded from performance studies because they no longer exist. It often causes the results of studies to skew higher because only companies which were successful enough to survive until the end of the period are included.”

    For the purposes of my argument I am going to paraphrase this
    “In Mr Covel’s book, survivorship bias is the tendency for trend followers to be excluded from performance studies because they are no longer trading. It often causes the results of studies to skew higher because only the results of successful trend followers who were still trading when the book was published are included.”

    Let’s clarify the issue. There are many successful trend followers with impressive long term track records. True. This is beyond any doubt. Their records speak for themselves. Are these trend followers and their records indicative of what anybody can do if they are equally disciplined and follow a proven trend following method? Now that is a question! Are they just lucky? Well, stating the obvious, documented fact that they are successful is not sufficient evidence to rule out luck. Absence of evidence is not evidence of absence. They may be in the data due to the effects of survivorship bias, and this is the issue that needs to be addressed.

    Your book is about trend following success. Let’s take the top 25 Trend Following Wizards – assuming the list followed and blogged about at […]. In fact many of the names on this list are the same as are mentioned in the book. Now, let’s further assume that these names are the top 25 of a universe of 1000 trend followers that were studied for the purposes of the book. Hypothetical conversation now follows:

    Mr Covel, “Trend following works because these 25 I have written about are successful trend followers.”
    Critic, “Hang on Mr Covel, I agree that these 25 are successful, but what about the other 975?”
    Mr Covel, “These 25 trend followers have made a lot of money.”
    Critic, “True, the record shows that. But what about the other 975?”
    Mr Covel, “These 25 have made a hell of a lot of money!”
    Critic, “Yes, I know, you keep saying that. But what about the other 975?”
    Mr Covel, “One of these trend followers has made so much money that he owns The Boston Red Sox and a British football league team.”
    Critic, rather timidly, “Excuse me Mr Covel, the other 975?”
    Mr Covel, “Are you suggesting that these 25 were just lucky? Collectively they have made A LOT OF MONEY! Doesn’t that say something to you?”
    Critic, “Err, well, um, 25 out of 1000 is only 2.5%. Assuming a normal distribution, this puts them in the tail of the distribution of trend followers. At a 5% significance level one would have to reject the null hypothesis that these returns are normal for trend followers. If I became a trend follower, what evidence is there that I could get these returns? Can you explain how you ruled out survivo…?”
    Mr Covel, interrupting, “Do you even know what you are arguing? These 25 are FILTHY RICH. You just don’t want to get it, do you? Moron!”

    Frankly, Mr Covel, this is where you appear to stand at the moment. There is a legitimate criticism of a small part of your work, but instead of answering it directly you issue challenges to your critics to prove you wrong whereas, in my opinion, you should offer more evidence to prove you are right.

    Now, let’s go to an alternative universe where another hypothetical conversation takes place:

    Mr Covel, “Trend following works because these 25 I have written about are successful trend followers.”
    Critic, “Hang on Mr Covel, I agree that these 25 are successful, but what about the other 975?”
    Mr Covel, “Well, I’m glad you asked me that. When I wrote my last book someone complained that I hadn’t addressed the issue of survivorship bias, so this is what I did this time.

    Firstly, I collected as much data as I could about these 975 in an effort to find out why many of them are not still trading today. One very interesting reason is related to the idea explained here: http://stats.stackexchange.com/questions/62/a-case-of-survivorship-bias. Although this talks about football and success as a football player being somewhat predicated on one’s date of birth, a similar effect was found to apply to the date of incorporation of a trend following fund. As you know, trend following sometimes has large draw downs, that is just a fact of life for trend followers. Some trend followers were unlucky in the timing of the opening of their fund. They immediately went into draw down, as did all successful trend followers at that time, but their backers immediately got cold feet and withdrew funds, forcing the closure of the fund. As soon as the funds were withdrawn the draw down stopped and trend followers experienced a huge equity up swing. Of course, this was too late for our unfortunates who had been forced to close. If they had incorporated 6 months later they would have started with the huge equity up swing. Since their closure was not an effect of trend following per se, but of bad timing of incorporation, it was necessary to trim these from the data as their closure is not relevant to the performance of trend followers. This affected 75 funds, so the valid pool of funds was adjusted to 900.

    Next, the records show that the National Futures Association revoked the licenses, under statutory disqualification regulations, of 15 funds due to accounting irregularities, again leading to the funds’ closures. As above, these closures are in no way reflective of the underlying performance of trend following and so the pool of funds for comparative purposes was adjusted to 885.

    Another, perhaps more surprising, thing we found was that many initially successful funds were taken over or bought out by bigger funds before they could become big and make a name for themselves in the fund management world. On paper this looks like a trend follower has “failed” by disappearing, but of course this is, in fact, not a failure and should still be counted as a success story. Adjusting for this effect by using the widely accepted statistical formula known as “ABC, this is what you now see,” our successful 25 trend followers now have the effective power of 30 successful trend followers, statistically speaking.

    During my investigative period approximately 20 trend following fund managers retired and wound up their operations completely. Again, by disappearing they appear to have failed, but using the above mentioned statistical correction, the power of the 25 again increases to 35.

    Now of course we have all heard of LTCM and their blow up, due in part to the hubris of their fund managers causing them to over leverage and resulting in a blow up of the fund. Well, unfortunately such hubris isn’t solely confined to the world of statistical arbitrage of option writing. My studies showed that 5 trend following firms blew up not due to deficiencies in the funds approach, but rather due to unauthorised trading and over leverage on the part of a group of risk managers. Again, using the logic outlined above, the valid pool of funds was adjusted to 880.

    Of course you can always rely on the government to change regulations in response to pressure from lobbying groups and special interest groups. Over my study period this happened no less than 4 separate times, forcing the merger of 10% of managed futures funds into larger trading entities simply to comply with new regulations. Again, this “disappearing” accounts for a statistical increase in power of the original 25 up to 60,

    Now I don’t have to state the obvious, but fund management is like any other business and therefore can fail for reasons entirely unrelated to their core business activity. According to information taken from the Investopedia website:
    “Some strategies, such as managed futures, had an attrition rate as high as 14.4% per year between 1994 and 2003, according to a study recently released by the European Central Bank titled, “Hedge Funds And Their Implications For Financial Stability” (August 2005)…failure is an accepted and understandable part of the process with the launch of speculative investments.” Taking this effect into account means that approximately 150 trend followers failed due to reasons entirely unconnected with their fund performance. The appropriate adjustment for my data set means that the 880 figure gets adjusted to 730

    Finally, you will remember the last presidential election when both parties were threatening to “hammer” those “fat cat bankers” and “oil oligarchs” whose “greed” caused the housing crises, high oil prices and that terrible storm at 4.38am on 19th August, in attempts to curry favour with voters by hiking tax rates on the banking and oil industries. Of course this is typical of the behaviour of politicians in a run up to an election, but what many people are unaware of is that the Federal Reserve Bank published a report that estimates that up to 35% of financial entities moved approximately 45.2% of funds under management to offshore tax havens and opened under new trading names. This had the effect of reducing the perceived performance of US based funds by 26.8%. According to the generally accepted advice of Standard and Poors and Moody, all performance metrics must be adjusted to account for this: in the case of my data set the power of the 25 increases to 75 and the valid base of my data set drops to 550.”

    Critic, admiringly, “Wow, you have really done your homework on this Mr Covel. What does it all mean?”
    Mr Covel, “Well, 75 out of 550 is about 13.5%. Assuming a normal distribution, this puts the original 25 of the study well within the tails of the distribution of trend followers. At a 5% significance level one cannot reject the null hypothesis that these returns are normal for trend followers. If you became a trend follower, and do what these 25 do, there is more than reasonable evidence that you could get these returns also. The issue of survivorship bias does not arise in these figures because I have looked at the entire universe of 1000 trend followers, the 25 top performers AND the rest of the 975, AND I HAVE MADE THE APPROPRIATE ADJUSTMENTS to account for survivorship bias. To quote myself from page 144 of my latest book, ‘The numbers don’t lie.’ So, what are you going to do now Mr Critic? Continue listening to Mr Cramer et al or take control of your own finances?”
    Critic, “Thank you, Mr Covel, you have converted me to a trend follower. No longer shall I be a sheep! Where do I send the cheque?”

    End of conversation.

    Of course, all the above is not an actual, accurate statistical adjustment, but rather illustrative of a rigorous empirical approach to the issue, as if I were an astrophysicist perhaps? Nowhere in your book do you present an argument similar to this second hypothetical conversation. Nowhere, as far as I can see, is there any attempt to address the question “But what about the other 975?” Shouting longer and louder about the 25, and issuing challenges, does NOT address the issue of survivorship bias. Therefore my original statement that “there is still no attempt to deal with survivorship bias in the performance data.” is valid criticism and still stands.

  26. Andrew writes:

    Let’s clarify the issue. There are many successful trend followers with impressive long term track records. True. This is beyond any doubt. Their records speak for themselves. Are these trend followers and their records indicative of what anybody can do if they are equally disciplined and follow a proven trend following method? Now that is a question! Are they just lucky? Well, stating the obvious, documented fact that they are successful is not sufficient evidence to rule out luck. Absence of evidence is not evidence of absence. They may be in the data due to the effects of survivorship bias, and this is the issue that needs to be addressed.

    All of my books address this head on–you have to make the choice what you believe. I maintain the evidence paints those with your arguments as the same folks who will argue all is luck in all aspects of life–so you might as well quit now and go die. Why do you even bother to wake up and try every day if you think your birth date and luck govern your life? No way to sugar coat it–pathetic and depressing thinking. You might think you are raising a counter, but you really just tell us how you understand life and success.

    Andrew writes more:

    Your book is about trend following success. Let’s take the top 25 Trend Following Wizards – assuming the list followed and blogged about at […]. In fact many of the names on this list are the same as are mentioned in the book. Now, let’s further assume that these names are the top 25 of a universe of 1000 trend followers that were studied for the purposes of the book. Hypothetical conversation now follows:

    What an argument. My books are not hypothetical, but your counter is. Do you have anything more than hypothetical? Seriously, you have spent a page of writing to disguise the fact that your entire argument is made up. Go find all of these failed trend following traders who do the right thing and still fail…and report back. Waiting.

    I caution readers who think they can toss trend following and its practitioners into some statistical frying pan and reach 100% certitude. If you apply zero common sense, like Andrew, you will never understand this subject. And oh, by the way, we might as well pretend the Turtles did not exist–cause of course the Turtles with public (and correlated) track records since 1988 are all just lucky too.

    It is somewhat boring to watch supposedly educated people tie themselves in knots.

  27. I found this page while searching for Trend Commandments. I bought _Trend Following_ after discovering the gem _Trade Your Way to Financial Freedom_.

    I’m polishing off my own system that has been throwing out a very good expectancy (30-50% with bi-monthly account turns, if I can find deep enough option markets and handle the heat). _Trend Following_ was excellent. I re-read often it for inspiration. My best trades happen when I blindly follow my system. My worst losses happen when I disobey it, remove my risk control, and go all in based on some analysis that I feel better about.

    I’ve come to accept that tactics must implement strategy – strategy cannot implement itself. My trend following tactics produce wins, and I never would have looked into this possibility without the system trading insights I got from these two books.

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